The time is right

July 21, 2008

WARREN - Talk of foreclosures and the subprime debacle might have initially scared Kristi Rodgers, but that didn't stop the local woman from climbing onto the first rung of the housing ladder.

Rodgers, 26, of Warren, purchased a home for the first time six months ago. Although market conditions made her search difficult, Rodgers maintains that purchasing has its benefits.

''I love it,'' said Rodgers. ''It means cutting grass that you actually own. It's like having a stake in a business.''

Falling home values were a concern for Rodgers, who says she saw some drastic decreases.

''There would be a house on the market, and I would say that I would wait,'' recalled Rodgers. ''And then I would drive by a month later and the house would be $10,000 cheaper.''

Large drops in value are only the latest in a series of developments that have plagued the housing industry in recent years. Despite all that has been said and written, however, experts say the market is rife with deals.

Fact Box

Tips from local experts:

Learn to save money. Getting into the habit of saving should begin early in life and continue into adulthood. With larger required down payments likely in the future, savings is more important than ever.

Have an emergency savings account. What would you do if your furnace broke or your major appliances needed repair? Having enough money stashed away for emergencies is essential.

Buy within your range. Experts say you should spend no more than 30 percent of your gross income per month on a house payment. And just because you're approved for a more expensive home doesn't mean you can afford it.

If possible, work with a locally-based lending institution. Local lenders are more likely to know actual values of area homes.

Check with local, state and federal government agencies to see if you qualify for any first-time homebuyer programs. Many loan and grant programs exist for buyers who meet certain conditions.

''It's a great time to be a first-time homebuyer,'' said Andrea Lupton, president of the Warren Area Board of Realtors. ''We're seeing the best deals now that we've ever seen.''

Lupton explained that the foreclosure crisis may actually improve market conditions for prospective buyers, since there is currently a glut of homes on the market that need to be sold.

Although current conditions may be advantageous to potential homeowners, the process of preparing for the first home purchase must begin years in advance.

''Savings is more important now than it ever has been,'' said Andy Barkley, director of member services for Greater Warren Credit Union. ''It is so important to save and to start saving early.''

Given the state of the housing market the past few years and the inevitable tightening of credit restrictions in the near future, Barkley says future homebuyers must expect bigger down payments.

''The days of having little money down are gone,'' said Barkley.

So, too, are the days of easy credit, which leads lenders to emphasize the importance of good credit to prospective buyers. No potential buyer should think about seeking loan pre-approval before taking a key introductory step, according to Laura Green, a mortgage loan consultant for Seven Seventeen Credit Union.

''The first thing I want them to do is to go to annualcreditreport.com and pull all three of their credit reports,'' said Green.

Once a potential buyer is pre-approved for a loan from a financial institution, it's important to close the gap between what's available and what's realistic.

First-timers must learn to budget their money and shop for homes that they can afford, not just those in price ranges for which they have been pre-qualified.

''You can be qualified for more than you can afford,'' Green points out.

Finding a home whose price is realistic becomes all the more crucial when first-timers realize that owning a home incurs many incidental expenses, according to a local credit expert.

''You can't just call the landlord and have them come over and fix the spouting,'' said Victor Russell, regional manager for Consumer Credit Counseling Service of Northern Ohio. ''If you don't have money set aside, then you have to start borrowing and you can start digging bigger holes.''

Hiring a certified home inspector to expose any problems in the property is an important step that could lead to savings later, Russell added.

Despite the many steps involved, Rodgers says her purchase has proven to be the right choice.

''At the end of the day, I am very happy and feel very blessed with the decision I made.''